DID EPF LOSE RM576 MILLION OR RM203 MILLION IN FGVH SHARES? IS SOMEONE NOT TELLING THE WHOLE TRUTH?

Felda Global Ventures Holdings Plc (FGVH) was listed on the KLSE in 2012 mainly due to arm-twisting and manipulation by PM Najib. Pre-listing multi-billion ringgit losses in the US due to Najib's incompetency, were covered up. Refer to my August 2015 blog post.  CLICK HERE.

Based on the above table derived from FGVH's audited accounts for the year ended 31 December 2014, EPF had invested in about 192 million FGVH shares costing RM876 million @ RM4.55 per share. This showed a book loss in 2014 of RM576 million.

Assuming EPF had lost and average of ONLY RM2 a share in selling off it's entire holdings of FGVH shares, it would have registered a realised loss of RM385 million.

However, on 3 April 2017, EPF announced a realised loss of RM203 million in FGVH shares in 2016. CLICK HERE. It had announced in December 2016 that by then it had sold off its entire stock of FGVH shares. 

This leads us to suppose that the RM203 million was only a portion of a much larges loss in total. More losses must have been realised in earlier years or written off as provisions in a 'mark to market' accounting policy.

It is not possible to get the exact total realised loss on FGVH shares by sifting through EPF's published accounts, as specific details are rarely disclosed there, if ever. The analysis of RM3.39 and RM3.97 billion losses on investments in 2014 and 2015 are not available:

It is also curious and suspicious that the Ministry of Finance (MoF) added in this statement, to try and reduce the impact of the shocking RM203 million loss:

"However, the EPF had made RM105.77 million dividend income from FGVH shares."

That made it look as though EPF had lost only RM97 million (203-106). This is NOT REMOTELY how a savvy investor anywhere in the world, would look at investments  and returns:

1. RM105.77 million in dividends gives an average rate of return of only about 3% over 4 years (2013-2016). This is below par for an investment cost of RM876 million, as minus inflation of about 3% a year, the net return is a pathetic 0%!!!

2. There is the risk free opportunity cost to consider. Had EPF placed RM876 million on FD with a bank, it would have earned a minimum of say, 876 x 4%=35 million a year x 4= RM140 million. This is more than the RM105.77 dividends AND, its capital would have been intact!

3. If EPF had cut it's losses early, it might have been able to re-invest the money in blue chip shares, which would have given a capital gain rather than a massive loss. Instead they paid heavily for allowing themselves to be coerced into a dud investment by Najib.

It is to hide this huge Najib blunder (he is also the Finance Minister) that the MoF added in that spin about $105.77 million dividend income without explaining it further. But that is exactly what we have come to expect from a MoF led by Najib and where, its Chief Secretary, Dr. Mohd Irwan Serigar Abdullah, has since 2009 been assisting kleptocrat Najib in covering up the even greater humongous looming 1MDB loss of RM95 billion, due to massive fraud by Najib, his family members and his cronies. CLICK HERE.

Did heads roll at the EPF? There is no culture of honour in a government of thieves. Some have written that RM576 million represents less than 1% of EPF's RM700 billion assets, and so it's no big deal. But that is exactly the type of thinking that allows the crooks like Najib to loot and plunder at will. 99.99% of us will never earn anywhere near $576 million in our lifetime. That money could have been invested in schools, hospitals and other much needed infrastructure. It's downright criminal to lose RM576 million due to incompetency, negligence and abuse of power by a prime minister and his crony head at EPF!

So, EPF must come clean about how much it actually lost in TOTAL on FGVH shares. Remember, EPF's money belongs to its contributors, NOT the government. Hard working citizens are sinking under the weight of stagnant wages, GST, rising food cost, transportation, petrol, soaring rents, house prices and inflation (record 4.5% in 8 years, in y-o-y to February 2017).

More than that, the government must disclose how much in total many GLC's and State Governments have actually lost by being bullied, again by Najib, to prop up the ill-advised listing of FGVH shares!

As at 31 December 2014, these entities had a book loss of nearly RM8 billion!!! (See table above). Many of them would have taken out loans from banks to finance their share acquisitions, which means their losses would have been higher, with loan interest!!!

As I have said many times before, Najib has the touch of the plague and the kiss of death whatever mega project he proposes - FGVH, 1MDB, PPFI etc., etc., etc. He does not have the knowledge, skills or qualifications to manage his children's piggy bank, let alone the complexities of a country's economy.

But, Najib can't let go because of ego, face, and false pride born of cancerous Ketuananism. He suffers from the illusion that somehow, being the son of a former prime minister, he is destined for global success and a place in the history books. But, instead, his repeated failures have cost the nation, at the very least, RM150 billion in a blazing trail of stupefying losses.

The citizens must seriously endeavour to put him out of his misery soon, like yesterday!